You can create a wonderful party that your child will remember without going beyond your means, and these tips will help:  

1.  Have a party in a free setting.

If the weather is nice, have your party at a local park or a beach where you can take advantage of built in entertainment features.  Let the kids run around and use up some of their pent up energy before trying to organize games and things.  Make sure the place you choose does not require a picnic permit before planning your party.  If a permit is required, it's usually simple to obtain and free.  In some areas, a deposit may be required, but it will be returned as long as you clean up after your party.  

Note:  most parks and beaches do not allow glass containers.

2.  Set a budget and stick to it.

It is very tempting to go over budget, with all the cute little items that are available today.  Be firm.  If you have already purchased several things and then find something you like better, return one of the original items before purchasing anything else.  

3.  Keep food costs down.

Having a party at 2:00 or 3:00 in the afternoon will help keep the cost down, by allowing you to serve snack foods instead of heartier foods that may be expected if the party is closer to a mealtime.  Cheese and crackers, chips and pretzels, or veggies and dip are appropriate snacks for this time of day.  If you can't manage this time frame and need to have the party at mealtime, consider Sloppy Joe's or something else that goes a long way.

4.  Compromise when planning theme parties.

Theme parties can become expensive quickly.   It is tempting to buy every available item that represents the theme.  You can compromise by selecting a certain amount of theme items and substituting plain items where appropriate.  For example, choose themed plates, but use color coordinated napkins and cups.  Or, choose themed treat bags but select regular items to go inside rather than buying expensive themed favors.  Be creative and you will find a good mix.  

5.  Enlist help from friends.

See if you can talk a friend into dressing up as a clown, instead of hiring one.  Or, if you are having a theme party, ask a friend to become the super hero or princess fairy.  The best way to persuade someone to do this is to offer to return the favor when his or her child has a birthday. has a great selection of birthday party invitations for kids and adults.